Educational Articles

Drug Roundup - January 18, 2013

Michael Ratty
| January 18, 2013

Fourth-Quarter Earnings Season is Right Around the Corner

Now that 2012 is done and in the books, investors will be eager to see how some of the world’s top drugmakers fared. With several members of “big pharma” scheduled to release fourth-quarter, and full-year results in the coming weeks, we anticipate much of the focus will be geared toward pipeline development and how new products are performing following one of the largest patent cliffs in the industry’s history. Some noteworthy releases include Johnson & Johnson (January 22nd JNJ - Free Johnson & Johnson Stock Report), Pfizer Inc. (January 29th PFE - Free Pfizer Stock Report), and Merck & Co. (February 1st MRK - Free Merck & Co. Stock Report).

Merck Pulls the Plug on Tredaptive

Merck recently announced it will stop selling the cholesterol-fighting drug, which is primarily sold in overseas markets, after the treatment was shown to be ineffective and potentially harmful. Sales of Tredaptive, which is approved in 70 countries and sold in 40, have been suspended across the board after findings revealed last month showed it didn’t reduce heart attacks and led to non-fatal serious side effects. Given that the product generated less than $20 million in 2012, we do not foresee its absence to have any meaningful impact on the top line going forward, but it is a situation worth monitoring due to the significant amount of patients who have been prescribed the drug. Tredaptive was never approved in the United States.

High Hopes for Eliquis in 2013

The stroke prevention drug, to which Pfizer and Bristol-Myers Squibb (BMY) are co-partners, looks to be one of the industry’s next blockbusters after gaining U.S. regulatory approval at the end of 2012. It was the final regulatory hurdle the drug had to pass after already being approved in Japan and Europe during the weeks prior. Management at both companies believe Eliquis could have a huge impact in 2013 as it has shown significant advantages over the current atrial fibrillation treatments on the market. Analysts are estimating the drug could reach peak sales of more than $5 billion a year later in the decade. Eliquis is expected to be widely available in the U.S. during the first quarter of 2013.

Strides ’ Agila Unit is Generating Interest among Large Pharma

A few of the world’s largest drugmakers have expressed considerable interest in purchasing the injectable-medicines unit of India-based drug supplier, Strides Arcolab Ltd. While details of a potential acquisition have not yet been disclosed, both Pfizer and Novartis (NVS)are said to be among the big-time names looking to add Agila to their corporate umbrellas. Analysts estimate the unit could fetch up to $2 billion.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.